Soft US data stokes recession fears

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2018 high at 1.4377. Setbacks should be well supported above 1.2000 on a monthly close basis.

• R2 1.3048 – 6 November high – Strong
• R1 1.3015 – 20 March/2025 high – Medium
• S1 1.2800 –  Figure – Medium
• S2 1.2768 – 5 March low – Strong

GBPUSD – fundamental overview

Market sentiment towards the Pound is running high amidst global trade tensions. The UK is less vulnerable to potential fallout and this is reflecting in the price action. The currency has even done a good job shrugging off weaker CBI numbers. Key standouts on Wednesday’s calendar come from UK inflation data, Canada wholesale sales, US durable goods, Fed speak, the Bank of Canada Summary of Deliberations, and ECB speak.

USDJPY – technical overview

There are signs of a meaningful top in place after the market put in a multi-year high in 2024. At this point, the door is now open for a deeper setback towards the 140 area.

• R2 151.31 – 3 March high – Strong
• R1 150.95 –25 March high – Medium
• S1 146.54 – 11 March/2025 low – Medium
• S2 145.91 – 4 October low – Strong

USDJPY – fundamental overview

A hawkish leaning BOJ Minutes may be helping to invite some renewed Yen demand after the currency had been taking a hit in recent sessions from softer economic data and worry around US tariffs. Key standouts on Wednesday’s calendar come from UK inflation data, Canada wholesale sales, US durable goods, Fed speak, the Bank of Canada Summary of Deliberations, and ECB speak.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6000 would give reason for rethink. A monthly close back above 0.7000 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6409 – 21 February/2025 high – Strong
• R2 0.6392 – 18 March high – Medium
• S1 0.6187 – 4 March low – Medium
• S2 0.6164 – 17 January low – Medium

AUDUSD – fundamental overview

The Australian Dollar has been generating more bids after the RBA forecast 2.25% GDP in 2025-2026 from 1.4% in 2023-2024. Key standouts on Wednesday’s calendar come from UK inflation data, Canada wholesale sales, US durable goods, Fed speak, the Bank of Canada Summary of Deliberations, and ECB speak.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in at the 1.5000 psychological barrier. Setbacks should be very well supported ahead of 1.4000.

• R2 1.4595 – 30 January high – Strong
• R1 1.4544 – 4 March high – Medium
• S1 1.4239 – 6 March low – Medium
• S2 1.4151 – 14 February/2025 low – Strong

USDCAD – fundamental overview

The Canadian Dollar has been better bid in recent sessions, getting a boost from the news that PM Carney expresses a willingness to negotiate with the US on trade tariffs. Key standouts on Wednesday’s calendar come from UK inflation data, Canada wholesale sales, US durable goods, Fed speak, the Bank of Canada Summary of Deliberations, and ECB speak.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5469 will intensify bearish price action.

• R2 0.5900 – Figure – Medium
• R1 0.5832 – 18 March/2025 high – Medium
• S1 0.5677 – 11 March low – Medium
• S2 0.5585 – 28 February low – Medium

NZDUSD – fundamental overview

We've been seeing some relative weakness in the New Zealand Dollar, with the currency getting dragged down by a dovish RBNZ outlook and this latest news backing the outlook up after the central bank said labor conditions were deteriorating. Kiwi has however been better bid against the US Dollar in recent sessions on the back of a rebound in US equities. Key standouts on Wednesday’s calendar come from UK inflation data, Canada wholesale sales, US durable goods, Fed speak, the Bank of Canada Summary of Deliberations, and ECB speak.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5386, with only a weekly close back below this level to compromise the structure. Until then, the focus remains on the formation of the next major higher low.

• R2 5877 – 4 March high – Medium
• R1 5800 – Round number – Medium
• S1 5509 – 13 March/2025 low – Medium
• S2 5386 – 6 September low – Strong

US SPX 500 – fundamental overview

Going forward, it will be important to keep an eye on Trump trade policies, inflation, bigger picture economic data and the Fed policy outlook. Any of these variables are capable of easily ruffling some feathers and we've already seen a little of this as 2025 gets going.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension towards 3100. Setbacks should now be well supported above 2500 on a monthly close basis.

• R2 3100 – Round Number – Medium
• R1 3058 – 20 March/Record high – Medium
• S1 2833 – 28 February low – Medium
• S2 2730 – 27 January low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in recent months with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.